Huw Jones

LONDON (Reuters), – The requirement that regulators keep the financial industry globally competitive after Brexit cannot bring back the devastating booms or busts of past generations, a Bank of England senior official stated Monday.

Britain’s Finance Ministry has stated that they will give the Financial Conduct Authority (central bank) a formal goal to encourage financial sector competivity and long-term economic development. This objective is without impacting their ability or consumers to stay safe and protect.

After Britain left, London was cut off from much of the European Union by its financial sector.

Critics are concerned about a return back to the ‘light touch’ regime which saw taxpayers bail out the banks during the financial crisis more than a decade ago.

Vicky Saporta (executive director of the central bank) said that much depends on the way the objective is written.

Saporta stated that if one wants to prevent short-term boosts in financial service exports, which could lead in busts not good for long-term economic development, then one should nest competitiveness in the longterm economic growth goal.

At the moment, both FCA and BoE need to ‘have consideration’ competitiveness. This is a less stringent requirement.

Britain’s “Solvency II”, EU-inherited insurer capital rules is being reviewed as a means of determining how far the UK can take its “Brexit freedoms to create its own rules. However, Saporta said it shouldn’t compromise protection for policyholders.

Saporta indicated that after the government has laid out its plans, the BoE will meet mid-year to discuss how changes can be implemented.

Other reforms could be influenced by the new objective of competitiveness, such as the implementation new global bank capital rules and making Britain’s wholesale market more appealing to international investors.

Edwin Schooling Latter (FCA Director of Wholesale Markets), stated to lawmakers that “low standards are not conducive to long term growth and competiveness.”

Schooling Latter stated that there is no specific issue on the table “where I’m concerned that Treasury, as an example, might be pressing us to adopt lower standards than what we believe is necessary.”